Nigeria’s economic growth is expected to slow to 3.7 per cent in 2027 as easing global oil prices reduce external revenue inflows, according to the African Development Bank Group’s African Economic Outlook 2026 report.
The report projected that Nigeria’s economy would grow marginally from an estimated 4.0 per cent in 2025 to 4.1 per cent in 2026 before declining in 2027.
According to the AfDB, the projected growth in 2026 will be supported by higher oil prices and production, expansion in the services sector, and increased public investments in electricity, transport, and logistics.
The bank stated, “Growth in Nigeria, the region’s largest economy, is projected to increase marginally from an estimated 4.0 per cent in 2025 to 4.1 per cent in 2026, supported by increasing oil prices and production, growth in the services sector, and increased public investment in electricity, transport, and logistics.”
It added that growth is expected to decelerate to 3.7 per cent in 2027 due to anticipated declines in global oil prices and reduced external revenue inflows.
The AfDB warned that Africa’s medium-term economic outlook remains vulnerable to inflationary pressures, exchange rate depreciation, supply chain disruptions, and tightening global financial conditions.
The report noted that rising fuel and fertiliser prices could weaken agricultural productivity, worsen food insecurity, and increase inflation across the continent.
According to the bank, persistent inflation may force central banks across Africa to tighten monetary policy further, which could reduce private sector lending and weaken economic growth.
The institution also warned that prolonged global shocks could increase debt vulnerabilities, raise borrowing costs, weaken fiscal balances, and limit public investments and social spending.
To cushion the impact of recurring global shocks, the AfDB urged African countries to adopt coordinated fiscal, monetary, and structural reforms.
The bank advised governments to improve domestic resource mobilisation, broaden tax bases, digitise tax administration, and strengthen transparency and accountability in public finance management.
It also encouraged African economies to attract and retain external financial flows, particularly in emerging sectors such as renewable energy and data centres.
The report stressed that preserving macroeconomic stability and deepening domestic financial markets would be critical to sustaining investor confidence and preventing capital flight.
The AfDB further recommended proactive crisis response measures, including contingency financing arrangements, diversified sourcing of fuel and fertiliser, and temporary liquidity support for distressed businesses.
In the report’s foreword, AfDB Group President, Sidi Tah, said Africa continued to show resilience despite growing global and regional challenges.
He noted that African economies expanded in 2025, with average real GDP growth strengthening to 4.4 per cent, placing the continent among the fastest-growing regions globally.
Tah said Africa must raise annual growth to at least seven per cent over several decades to drive large-scale job creation and reduce poverty significantly.
The report also revealed that Africa could unlock up to $1.43tn in additional annual financing by addressing inefficiencies in resource mobilisation and utilisation.
According to the AfDB, nearly $469bn remains untapped due to weak tax compliance, poor administration, and ineffective policy design, while more than 40 per cent of public investment is lost to inefficiencies.
The bank projected that West Africa’s growth would stabilise at 4.7 per cent in 2026 and 4.5 per cent in 2027, compared to an estimated 4.8 per cent in 2025.
It added that 10 out of the region’s 15 countries are expected to record growth of at least five per cent in 2026, placing them among Africa’s fastest-growing economies.
